Cash grants give relief to pubs but breweries left out in the cold
After the bleakest of mid-winters, with pre-Christmas trade limited to drinks with meals and another period of total closure from Boxing Day, pubs have welcomed the latest round of cash grants from the Government which may be enough to keep many from permanent closure.
But there is yet more pain for pubs to endure in this lockdown, as for the first time takeaway sales of alcohol are not allowed except for advance orders for sealed containers such as bottles and cans. Delivery services can continue, with some local pubs continuing to deliver cask ale in four-pint plastic flagons.
The situation facing breweries is even grimmer as they don’t qualify for the latest cash grants, although they could still apply for discretionary grants. This is because they have not been forced to close like pubs, although in reality most have seen sales drop by an average of 80% and have either stopped production or scaled it right back. Nor do breweries qualify for the business rates “holiday” that continues until the end of the tax year on April 5.
The cash grants to pubs depend on their rateable value — £4,000 for a rateable value of under £15,000; £6,000 for those rated between £15,000-£51,000; and a maximum of £9,000 for those over £51,000.
The Rose and Crown in North Oxford expects to receive a £6,000 grant, and is not affected by the ban on takeaway alcohol as it only delivers, including local real ales such as Shotover Trinity, Hook Norton Old Hooky and Vale Brewery Red Kite. Being a free house owned by the Hall family, it’s in a better position than many.
“Compared to the money we might have made, the cash grant isn’t huge,” said Adam Hall. “But coupled with the furlough system, business rates holiday and temporary reduction in VAT on soft drinks and food, it is fair and at least gives us some money to pay our overheads.
“Our small delivery service isn’t going to make us rich, but it does help. Some pubs have done well out of takeaway, but I can understand why the Government doesn’t want people buying takeaway pints and then drinking them around the corner with their friends.
“We are not far off breaking even since March, but there’s no chance of that for pubs still having to pay rent while thy can’t trade. It would be helpful to see the VAT cut to 5% extended to alcohol sales.”
Tess Taylor, a director of Tap Social brewery, said it would continue to offer Friday pick-ups for “click and collect” sales, and has now rolled out national as well as local delivery of its beers.
“It’s been a very difficult year for us, but we have a good local following and regular supporters,” she said. “We haven’t had any grants from the Government, and now it seems we won’t even get the £1,000 Job Retention Bonus for keeping people on until January. We have kept some people on the books for compassionate reasons.
“The ban on takeaway is not entirely clear, but I understand the ban on open containers that could encourage people to drink in the park. But to ban all takeaway is so unfair when people can just go to a supermarket.”
CAMRA has welcomed the cash grants to pubs but warned of the need for ongoing support, while attacking the takeaway ban. CAMRA national chairman Nik Antona said: “The national lockdown is yet another devastating blow for an already struggling industry, which follows hot on the heels of nearly a year of restrictions, curfews and forced closures.
“It is clear now more than ever that the Government must introduce a new, long-term and sector-specific financial support package to help these businesses survive the coming months. While one-off grant support is welcome, it is nowhere near enough to cover the haemorrhaging costs for pubs and breweries that don’t see any end in sight.
“Takeaway sales, in sealed containers, for people to take home, were a real lifeline for the trade in previous lockdowns. Restricting that route to market now would be a death knell for many pubs, and this will once again provide an unfair advantage to supermarkets and off-licenses that don’t face similar restrictions.”
The British Beer and Pub Association said that the latest cash grants would be worth £277 million to pubs, but must be delivered immediately. Chief executive Emma McClarkin said: “If the grants take weeks or months to get to the pubs they are meant for, it will be too late. The Government now must also provide the same levels of support to brewers who have suffered months of closure of a major trading channel in pubs, but are not eligible for the support announced.”
James Calder, chief executive of independent brewers alliance SIBA, called for a rethink of proposed tax increases with changes to the Small Brewers Relief scheme, with 300 of its members writing to the Prime Minister to plead their case.
“Small breweries lose 80% of their sales when the pubs close, and throughout the crisis have not had access to the same level of support as the wider hospitality sector, including business rates holidays,” he said. “Sales through takeaway, click and collect and drive-through have enabled many to just about survive up to now. This reversal in policy directly discriminates against small businesses while allowing supermarkets to continue to sell beer from global breweries.”
SIBA is calling for hospitality support to cover small breweries, including the business rates holiday; compensation for the millions of pints poured away when pubs are forced to close; and to scrap the proposed changes to Small Brewers Relief.
Let’s hope the pleas of CAMRA and our trade associations are heard. Then perhaps we can start planning, not just for the re-opening of pubs and ramping up of production by breweries, but also to fight for the hundreds of pubs likely to be put up for sale by the large pubcos and breweries which have lost so much money.